Money Management

How to Pay Off Your Credit Cards – When No One Wants to Help You

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Just because you’ve been turned down for balance transfers and personal loans, it doesn’t mean you’re destined for bankruptcy.

America is drowning in debt – and credit cards are dragging us down.
According to statistics from Debt.com…

  • We owe more than $1 trillion on our cards. That’s enough to buy every NFL, NBA, NHL, and Major League Baseball team in the country.
  • Nearly two-thirds (over 65%) of us carry monthly balances. We’re paying the credit card companies staggering interest rates each month.
  • We owe enough to buy our families food for a year. The average household owes more than $16,000 on their credit cards.

And while a common narrative is that people run up credit card balances with frivolous spending, the reality is that most people facing challenges with debt didn’t have any other options. Stagnant incomes, rising prices and the ever-increasing cost of living is leaving millions of Americans living paycheck to paycheck. Then, when a disaster strikes, these individuals are forced to go into debt just to stay afloat.

Meet Diane – A single mom who found a solution

That’s the type of situation that Diane faced after she lost her job. She was out of work less than two months, but as a single mother of two, she was already stretched thin with no emergency savings to fall back on. So, when her company laid her off, all her bills, groceries and other necessities went on credit because it was the only choice she had. It was a major setback that she’s still working to recover from.

Once she got a new job, Diane was optimistic that she’d be able to catch up. But getting ahead of her credit card debt proved to be harder than she’d anticipated. Her new job was covering all the expenses in her budget, but there wasn’t much left after that. She didn’t have any extra cash to make more than the minimum payments on her credit cards. And anytime an unexpected expense came up, she was forced to put that on a credit card, too. So, instead of regaining stability and control over her debt, her balances were slowly getting higher.

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Things got worse in 2017 when interest rates started to rise. The Federal Reserve raised interest rates three times in 2017 and another four times in 2018. Since almost all credit cards have variable interest rates, consumer interest rates gradually increased. And anyone with high balances like Diane also saw their monthly minimum payment requirements increase as well.

As a result, Diane was forced to start juggling bills just to make ends meet. There were some months where she just couldn’t keep up with everything. She finally realized that her strategy wasn’t working and that she needed to find a solution. So, she started to look into debt relief options online.

Diane’s problems continue…

That’s when Diane ran into another problem that her challenges with credit card debt had created. She’d only missed a few payments on a few credit cards, but those little missteps had dropped her credit score by over 100 points. She got rejected when she applied for a balance transfer credit card. Then she got rejected on a debt consolidation loan, too. Nobody was willing to extend her any new credit, so any do-it-yourself solution was off the table. If she wanted to avoid bankruptcy she needed help.

What to do when low credit scores are limiting your options

This isn’t an uncommon situation. Only 30% of Americans have credit scores that are considered excellent (750 and above); another 13% have a score that is considered good (700-749). But that leaves more than half of Americans (57%) with fair-to-poor credit ratings.  So, while do-it-yourself debt solutions exist, they don’t work for a large percentage of the population who don’t have the credit score necessary to qualify.

Diane worried that she was headed for bankruptcy, which would just set her credit back even more. But after seeing a commercial for Debt.com, she decided to make one last attempt to find a solution. She spent about 30 minutes on the phone with a representative reviewing her situation. By the end of the call, she had a solution that would pay off her debt. It wasn’t going to solve her problems overnight, but she finally had peace of mind that she’d be able to become debt free without going through bankruptcy.

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If this situation sounds familiar, Debt.com may be able to help

We don’t just offer one solution – in fact, we don’t actually offer any solution directly. Instead, we work with a range of accredited financial service providers, so we can match you with the best solution for your unique financial situation. With one simple, free consultation with one of our debt resolution specialists, you can develop a customized plan to get out of debt that fits your goals.

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